Email this article to a friend

UBS, the Swiss bank, has become the latest European bank to overhaul and rationalise its technology operations in a bid to cut the costs associated with the highly expensive function.

The bank has created IT International, a new operation based in Zurich and New York, that will manage the entire bank's IT infrastructure, the underlying network on which its systems operate. UBS's existing IT departments will continue to be responsible for building the systems to operate on that infrastructure.

The new group will comprise 3,000 IT specialists and will be operational from the middle of this year. The bank hopes the unit will enable it to save Sfr150m (€96m) this year with the sum projected to rise to Sfr250m in 2005.

The bank said it was too early to know what effect the new division would have on staff numbers.

However, a spokesman said there was an ongoing policy of streamlining staff number in Zurich, and that job losses in 2004 would be roughly the same as in 2003, when it cut 800 jobs in the first three quarters.

The move to centralise the IT function follows similar plans by other European banks to rationalise their IT departments to cut costs and improve performance. Many have contracted out their businesses to third parties as a means of saving money.

In December, ING, the Dutch bank and BNP Paribas, the French bank, outsourced their European IT infratructures to IBM. In 2002, Deutsche Bank and JP Morgan also contracted out elements of their IT infrastructure to IBM.

In late 2002 UBS Global Asset Management's UK operation cut back on its back office operations, including IT, when 15 of the support staff were made redundant.